OpenTheBooks CEO John Hart joins Varney & Co. to discuss long-term deficits in Social Security and Medicare as fiscal pressure mounts.
American retirees who receive Social Security will see a year cost of living adjustment (COLA) next year, and a new report projects next year’s earnings increases may be smaller than expected for many retirees.
A new analysis by The Senior Citizens League (TSCL) predicts that Social Security’s 2027 COLA will be 2.8%, which would be the same benefit increase as the 2026 COLA.
That would equate to a rate increase Social Security Benefits check retired workers $56.69, increasing benefits from $2,024.77 to $2,081.46 per month.
“Americans have every right to be concerned about our current COLA projections,” said TSCL executive director Shannon Benton. “The reality is that many seniors already earn only about 58% of their income as their working-age counterparts, and you’d be hard-pressed to find a middle-class or working-class American who thinks the economy is doing well right now, especially with oil prices rising.”
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The Social Security Administration’s COLA for 2027 will be based on inflation data from July, August and September, with an announcement in October. (Saul Loeb/AFP via Getty Images)
I Social Security Administration (SSA) calculates the annual Social Security COLA using inflation data variables from the consumer price index (CPI) based on the months of July, August and September. The agency announces the COLA every October, although last year’s announcement was delayed by the government shutdown.
TSCL’s estimate of a 2.8% COLA for 2027 was based on the year-over-year reading of the CPI-W coming in at 2.2% in both January and February, then rising to 3.3% in March.
Inflation jumped in March mainly due to the energy supply shock caused by the Iran war disrupting the flow of oil in the Middle East, as tanker traffic in the Strait of Hormuz was halted due to the conflict.
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Economists have warned against that inflation it may increase significantly in the next few months and may remain high until the end of the year depending on how long the impact of the conflict continues, although there is uncertainty about those predictions related to the duration and resolution of the war.
Social Security’s main fund is depleting due to the aging of the American population and rising enrollment, causing costs from benefit payments to rise more than the trust fund and income. income tax receipts can cover.
The latest projections estimate it will reach a plateau by 2032, at which point profits will be cut by 24% across the board to match income.
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The main Social Security fund is expected to reach maturity in 2032. (Mark Felix / The Washington Post)
TSCL also criticized the recent proposal to reform Social Security annual benefits The maximum income for Americans is $50,000 for a single person or $100,000 for a married couple.
The Six-Figure Limit Proposal proposed by the nonpartisan Committee on a Responsible Federal Budget (CRFB) would affect a small portion of Americans. The group notes that while it would not significantly delay the bankruptcy of the Social Security trust funds on its own, “it could significantly delay payments in combination with other reforms.”
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TSCL’s Benton said, “Reforming Social Security requires a two-pronged approach, strengthening income and benefits simultaneously to ensure prosperity for all Americans, of all ages.”
